Hey fans out there, i need your favor to sink into deep thoughts on the following questions:
1. Are you afraid to lose your hard-earned money?
2. Do you keep all your available cash in your savings account / fixed deposit?
3. Do you have all you cash in one single currency?
Should your answer to any of the above questions is "Yes", you are exposed to investment risk. Why? Read on....
1. Since you are afraid to lose, your sub-conscious mind will instruct you to keep it well in a "Tin can" stashed away from public eyes.
2. If you a little smarter, you would keep the money in your savings account or fixed deposit earning slightly over mediocre interest.
3. Thinking that S$ will remain strong against other currency, you chose to keep all your money in one currency.
All the above will subject you to very high investment risk. Still don't understand? Read on....
1. Putting your money in a "Tin can" will not earn you any interest; which will eventually be eroded by inflation + GST.
2. Being a little smarter, the little interest you receive for parking your money with a bank will only cover either inflation cost or GST.
3. Having all your money in one currency will only expose yourself to exchange rate risk. Also, most deposit interest rates on local currency (wherever you are) are lower. Hence, you might lose money due to exchange rate without knowing it.
Things got a bit brighter now? Therefore, it is good to have a qualified advisor help you plan your financials. Don't be Penny Wise Pound Foolish!
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